Did Molefe get the boot?

Brian Molefe says his resignation on Friday as CEO of the state-owned Public Investment Corporation was not for political reasons despite claims that a clique of the ruling ANC was intent on seeing his back

ANC sources ... ‘He simply trod on too many toes, funded questionable empowerment deals that enriched few and became a law unto himself’

Brian Molefe ... ‘Not at all, I was asked to extend my contract by finance minister Pravin Gordhan, but I indicated some time ago that I would not’

Molefe said he would not sign another five-year contract to continue as CEO of the country's largest fund manager, which manages R850-billion in government employee pensions, and will leave on April 12.

In recent years, Molefe came under fire from ANC top brass who felt he used the PIC's financial clout to enrich those close to former president Thabo Mbeki.

This included funding the Elephant consortium's stake in Telkom, in which Mbeki's former spin doctor Smuts Ngonyama and other Mbeki-acolytes have an interest, and financing the buyout of cement company Holcim by AfriSam, in which Mbeki's advisor Titus Mafolo held shares.

But on Friday, Molefe denied he had been effectively forced out by the Jacob Zuma administration.

"Not at all. I was asked to extend my contract by finance minister Pravin Gordhan, but I indicated some time ago that I would not," he said.

Instead, Molefe said, he felt that seven years at the institution was "about right", and he had a number of offers which he is considering.

This contradicts the view of senior ANC sources, who said the writing was on the wall for Molefe since Zuma's inauguration.

"He simply trod on too many toes, funded questionable empowerment deals that enriched few and became a law unto himself," one source said.

He said the party's deployment committee, in conjunction with its top six leaders, had made a collective decision not to renew Molefe's contract and to let it run its course.

Molefe declined to comment on rumours that he was being wooed for a position as deputy to Steven Koseff at banking group Investec.

"There have been a number of offers (from various parties), but I don't know what will happen. I'm on garden leave for three months, so I can decide then," he said.

But once that "garden leave" period ends, Molefe said he would be entitled to join any organisation - including a bank.

"My concern is that I've offended so many people in the last seven years, I don't know who'll take me," he said.

Over the years, Molefe embroiled himself in several high-profile spats, voting against a R59-million bonus for Shoprite boss Whitey Basson and clashing with Sasol and Barloworld over their sluggish transformation.

Molefe was one of Trevor Manuel's first recruits - from First National Bank - to his treasury team in 1996, and remained a key confidant even after he was deployed as head of the Public Investment Commission before it was converted into a corporation, the PIC, under his watch.

Until 2008, Molefe was among the select few who would gather at Manuel's home to brainstorm difficult economic challenges.

A former colleague said he was not surprised that Molefe had decided to leave the PIC. "Strategically and culturally, I think he would not have been comfortable with the style of the current government."

Said another: "He made many friends in treasury and in the government, but the unions never liked him."

But Molefe insisted that while "I would not pretend I was not a friend of Thabo Mbeki, Jacob Zuma is the president and I respect him. My loyalty is to the president, whoever he may be."

He said claims that he bent over backwards to "enrich" Mbeki's friends were unfounded.

"When it came to the Holcim deal, for example, that deal was decided on by the PIC board, so to say it was done for Mbeki is wrong," he said.

In April last year, Business Times revealed how Molefe was one of many under the regime of Mbeki who faced the axe and was to have his wings clipped as head of the PIC.

Prior to the elections last year, both Zuma and ANC treasurer-general Mathews Phosa called for a "review" of the mandates of state-owned funding vehicles such as the PIC.

Phosa, in particular, was scathing, saying some of them had hindered growth within the small business sector and "behaved like Standard Bank" by dishing out loans and sureties for empowerment deals. The ANC's election manifesto also called for a review of the role and functions of state-owned funding institutions.

In April, head of Business Unity South Africa Jerry Vilikazi told Business Times that many politically-connected individuals would see their "worth (to corporate South Africa) diminish with the change in the political guard".

"The reality is people who sold themselves on the basis of their contacts and networks in senior government circles will always find themselves exposed when there's a change in government. I've always cautioned against this ... because your selling point should be your skills and expertise."

Barely a month later, 91.7% of assets worth R721.5-billion and held by the PIC were transferred into the name of its biggest client, the Government Employees Pension Fund.